Rustbelt Recovery: Michigan Has a Budget Surplus And a Lower Jobless Rate Than Washington D.C.

NY Times -- "Over most of the past decade, budget deliberations in Michigan have taken on a glum and familiar monotony: What do we cut now? But the state that experienced an economic downturn earlier, deeper and longer than most of the rest of the country has made an unlikely discovery as its officials closed out its latest financial books: Michigan has a $457 million surplus. Even more surprising: Revenues, which had sunk or had been mostly flat for all but one year since 2000, have grown. Not a lot, but grown.Lately signs have shifted. Manufacturing jobs, often declared dead by frustrated workers, have picked up. United States automakers have increased production, saying sales are up, and General Motors, only a few years after a federal rescue and bankruptcy, recaptured in 2011 a crown some thought was merely a dusty memory — that of the world’s largest automaker. In part, as a result, the unemployment rate in Michigan, which reached 14.1 percent in 2009 and had regularly been among the worst several states in the nation, has lately been among states showing the most significant and continuing rates of improvement, though at 9.3 percent in December it is still above the national average.By the close of the state’s 2011 budget year, in September, Michigan had collected $8.8 billion in general fund revenues — more than $1 billion less the amount collected in, say, 2000, but noticeably up from the $7.6 billion in Michigan’s coffers in 2010, thanks to growth in state income and sales tax revenues. Officials are now projecting $632 million more in revenues over the next two years than they had been expecting." MP: After leading the country for most months in 2008 and 2009 with the highest jobless rate in the country, Michigan's economy has now recovered to the point that it ranked No. 11 for the month of December. Nine states and even the District of Columbia at 10.4% had higher jobless rates than Michigan's December 9.3% rate. Nevada now ranks No. 1 in the country at 12.6% and more than three percentage points above Michigan, and California has the second highest state jobless rate for December at 11.1%, almost two full points above Michigan.

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Mr. Speaker, Mr. Vice President, Members of Congress, my fellow Americans:
Today in America, a teacher spent extra time with a student who needed it, and did her part to lift America’s graduation rate to its highest level in more than three decades.

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Guest post by Mark Doms, Chief EconomistEarlier today, the Bureau of Labor
Statistics (BLS) released a report showing that the private sector added
172,000 jobs last month, and overall employment rose by 163,000. While there’s
more work to be done, the economy is creating jobs on a consistent basis.
The economy has added private sector jobs for 29 straight months, for a total
of 4.5 million jobs. In fact, since the beginning of the year, the
economy has added over 1.1 million private sector jobs. Today’s employment
report provides further evidence that the U.S. economy is continuing to recover
from the deepest recession since the Great Depression.
Additionally, the BLS report also
showed that the manufacturing sector continues to be a bright spot, which is
especially important for middle class families, because these jobs
pay high wages and provide high levels of benefits.
The good news is that the U.S.
manufacturing sector’s recovery continues: 532,000 new manufacturing jobs have
been created over the past 30 months, with 25,000 being added in July. In terms of production, manufacturing output is
up 19.8 percent from the trough reached in June 2009.
A
part of manufacturing that has been consistently strong is the motor vehicles
and parts industry which has added 165,000 jobs since June 2009.
Further, production of cars and trucks in the U.S. reached 10.5 million units
at an annual rate in June, a sharp contrast to the shockingly low level of 3.7
million units witnessed in January 2009. To continue the revival in
manufacturing jobs and output, it is crucial that we implement President
Obama’s proposals providing tax incentives for manufacturers, supporting
training for the workforce, creating manufacturing hubs, and ending tax breaks
for companies that send jobs overseas and provide tax incentives for companies
bringing jobs back to the United States.

Spain's prime minister, Mariano Rajoy, has finally admitted three things I have been saying for a long time
Spain's regions were in deep fiscal trouble if not bankrupt
Spain could not possibly hit its deficit targets for 2012
It is mathematically impossible for Spain to meet deficit goals without raising taxes, no matter how much he insisted otherwise.

Mark J. Perry submits:
The last recession hit the auto industry and the Michigan economy pretty hard. In the summer of 2009, the Michigan economy "hit bottom" as its unemployment rate peaked at 14.1% in August, which was 4.4 percent above the national average that month of 9.7% (see chart above).